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Regions Financial Resembles the Best in Richard Sherman

Stocks in this article: RF C

NEW YORK (TheStreet) - Hopefully, Citigroup's (C) institutional equities clients aren't San Francisco 49ers fans.

Just a few days after the Seattle Seahawks and their controversial star cornerback Richard Sherman sent the 49ers home empty-handed from a thrilling NFC Championship, Citigroup's regional and trust banking analysts Josh Levin and Arjun Sharma are willing to draw parallels to their coverage of financial sector stocks.

In a Tuesday research note, the analysts made the point that Regions Financial  (RF) is the Richard Sherman of the banking industry, albeit with some small differences.

"Regions Financial Corp: Talented Like, but More Congenial Than, Richard Sherman," the analysts wrote in a note reacting to the firm's fourth quarter earnings on Tuesday.

For those who might have been stuck in an elevator for the last few days, Richard Sherman is the Stanford University educated Seattle Seahawks cornerback who swatted away a last minute touchdown pass from San Francisco quarterback Colin Kaepernick to receiver Michael Crabtree, sealing a narrow victory and Superbowl birth for his team.

Sherman, a cocky all-pro cornerback, however, became a national sensation for more than just his clutch on-field play. In a post-game interview with Fox's Erin Andrews, Sherman called Crabtree a "mediocre" receiver, in what can objectively be called one of the worst displays of sportsmanship in recent memory.

So, according to Citigroup, Regions Financial may contain the savvy and performance of Sherman, albeit without a loud personality that could rub some the wrong way. It's worth noting that the analysts maintained a "neutral" rating on shares of the bank.

Levin said in an e-mail to TheStreet that he is not a Seattle Seahawks die-hard, but is a football fan who likes funny headlines.

The Citigroup analysts, in assessing Regions Financial's fourth quarter earnings, were heartened by the bank's guidance on expense reduction and were willing to look past results that included a 14% drop in profits and flat revenue year-over-year.

Because of "credible" guidance on falling expenses -- an issue that had previously been a concern among investors -- Citigroup revised its 2014 earnings per share estimate upwards to 85 cents from 80 cents, while increasing its 2015 EPS estimate to 95 cents from 85 cents.

Citigroup also said Regions Financial's earnings could reach $1.00 a share in 2016, reflecting improving operating performance and the sensitivity of the bank's assets to rising interest rates.

"Our absolute rating system requires a minimum 15% total return for a Buy rating, and we don't see that much upside at this time. However, on a relative basis we think RF will likely continue to outperform most of its peers," the analysts conclude. 

Citigroup did boost its price target on Regions Financial to $11.50 a share from $10. 

Regions Financial shares closed within reach of a 52-week high on Tuesday at $10.86.

-- Written by Antoine Gara in New York

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